I think all of us have thought about the future and wondered what might happen if we sold our printing business. We all ask ourselves the same thing: How much money could I get? Who would buy it? Would I have enough money to live on if I sold?
In today’s post, I’m going to share some very personal insights about how I sold a company I had owned for over 20 years. My “succession plan” was never a formal thing, but I did have a plan. I knew that some day I might want to sell and retire — or to simply sell my company as a way to make money and increase my net worth.
I haven’t shared much about what I’m currently doing career-wise since I sold all of my interests in the printing business. I will do that at a later time. But I will tell you that because I’m no longer involved in active ownership in the printing business, my perspective on “business” is different. Radically different. I discovered that while I was a print owner, I worked so hard every single day that — without realizing it — I had developed a type of tunnel vision about business in general that was heavily impeding my ability to see things as they really were. In other words, in retrospect, I came to realize that the difficulties and challenges I faced as a printer often insulated me from seeing opportunities … and pitfalls … to avoid.
If you’d like to sell your business, here’s how I did it. This is one way out.
Years ago, I started to look for several really good young men in their 20s who would be great workers now, but as time passed could also possibly become a “future owner” of my company. I was lucky enough to hire four great ones within a span of about five years. Brad, Rick, Dave, and Brian where all terrific employees, but there was one — Dave — who became an extraordinary employee and rose to the top.
I looked for someone with a strong family background, high IQ, good communication skills, likability, and character. These are tools I consider the essential elements of success. When Dave did his interview, he didn’t have a printing background. In fact, he had a peculiar background. His dad was a minister at a small Methodist church in rural North Dakota. Dave was working as a music teacher in the tiny town of Milnor, North Dakota — population 633! Dave was young and naive, but he had all of the necessary tools to become a success, so I hired him. Over time, he used his gifts to grow into a valuable employee. Eventually, I offered him a position as a sales rep in a company I owned called Marketing Ideas for Printers. He did good in sales, so I decided to offer him a management position.
This is where my succession plan began to take shape.
In order to retain Dave and give him financial hope for the future, I made him a managing partner in my company. I gave him a 50% share of the profits (no, that’s not a typo), and I told him I wanted him to “think like an owner.” He could hire and fire. He would also get a complete copy of the financial reports each month. He continued to grow and develop. He also earned a lot of money — sometimes maybe a little more than he should have — but my plan was working, so I kept it going. It was paying off.
I paid Dave a salary of $36,000.00 and gave him 50% of the monthly profits after I took the first 15% of sales each month. For example, if we had sales of $100,000 in a month, I took the first $15,000. I did not have a salary, hourly wage, or draw of any kind. I did take the first 15% of the gross sales at the end of the month. Dave received his salary of $3,000 for the month. Then, we split the profits 50-50. If we made a monthly profit of $7,000, Dave also got a profit sharing check of $3,500.
Well, things were going well, when an outside firm came along and offered to buy Marketing Ideas for Printers for a good sum of money. I seriously thought about accepting their offer, but instead I decided it was time to offer to sell my company to Dave. I offered him my company for the same price the outsiders were willing to pay. He was ready, and he said yes. I trusted Dave because we had worked together for years. He had proven himself over time. He knew our customers, he understood our mission, and he saw clearly the opportunities for the future. It all fit together perfectly. Today, two years later, the company under his leadership is more successful than ever.
So that’s my story. Nothing fancy or sophisticated. I had a simple plan, I had groomed and developed several “future owners,” and one of them became a superstar. It’s not the only way to do a succession plan, but it was a good plan. It was simple, easy to implement, and paid benefits all along the way. If you don’t have a succession plan, why not start looking for a talented 20-something and grow them into ownership?
It worked for me. Why can’t it work for you?
My name is Mike Stevens, and I am a printer.